The Upper Tribunal has recently handed down judgment in Fish Legal v Information Commissioner, determining that privatised water companies are public authorities within the meaning of Article 2(2)(b) of Directive 2003/4/EC on public access to environmental information and Regulation 2(2)(c) of the Environmental Information Regulations 2004.
This case is the first consideration by the Upper Tribunal of the guidance given by the CJEU in Fish Legal v Information Commissioner (C-279/12) (an earlier reference in the appeal proceedings) as to when a person or body is a public authority within the meaning of Article 2(2)(b) or Article 2(2)(c) of the Directive.
The CJEU ruled that:
“In order to determine whether entities such as United Utilities Water plc, Yorkshire Water Services Ltd and Southern Water Services Ltd can be classified as legal persons which perform ‘public administrative functions’ under national law, within the meaning of Article 2(2)(b) of Directive 2003/4/EC of the European Parliament and of the Council of 28 January 2003 on public access to environmental information and repealing Council Directive 90/313/EEC, it should be examined whether those entities are vested, under the national law which is applicable to them, with special powers beyond those which result from the normal rules applicable in relations between persons governed by private law.
Undertakings, such as United Utilities Water plc, Yorkshire Water Services Ltd and Southern Water Services Ltd, which provide public services relating to the environment are under the control of a body or person falling within Article 2(2)(a) or (b) of Directive 2003/4, and should therefore be classified as ‘public authorities’ by virtue of Article 2(2)(c) of that directive, if they do not determine in a genuinely autonomous manner the way in which they provide those services since a public authority covered by Article 2(2)(a) or (b) of the directive is in a position to exert decisive influence on their action in the environmental field.
Article 2(2)(b) of Directive 2003/4 must be interpreted as meaning that a person falling within that provision constitutes a public authority in respect of all the environmental information which it holds. Commercial companies, such as United Utilities Water plc, Yorkshire Water Services Ltd and Southern Water Services Ltd, which are capable of being a public authority by virtue of Article 2(2)(c) of the directive only in so far as, when they provide public services in the environmental field, they are under the control of a body or person falling within Article 2(2)(a) or (b) of the directive are not required to provide environmental information if it is not disputed that the information does not relate to the provision of such services.”
In considering whether the water companies were public authorities within Article 2(2)(b) (the ‘special powers’ test) the Upper Tribunal rejected the submission made on behalf of Fish Legal that it was enough if there was one power falling within this categorisation, but considered the following powers went beyond those resulting from normal rules applicable in relations between persons governed by private law:
- Compulsory purchase (para 107): the Tribunal considered that the power to seek a compulsory purchase order (albeit requiring approval by the Secretary of State) conferred two advantages on the companies. Firstly, the ‘formal process’ conferred an advantage not generally available, and an ability to ‘check’ the likely success of an application. Secondly, the leverage it provided in commercial negotiations.
- Byelaw making powers (109): the Tribunal considered that the power to make byelaws, which could include a criminal sanction for breach, was a power not available in private law, and was not comparable to a landowner’s power to enforce a licence to enter on and use land under civil law.
- Power to enter on or lay pipes in land other than under a street (paras 118-125): the Tribunal rejected the argument that such powers were not ‘special powers’ because the right could be obtained by means of, e.g. grant of an easement, under private law. The Tribunal considered that that the CJEU’s approach required the Tribunal to look at the powers resulting from the rules governing normal relations at private law, not the powers that could arise from the exercise of the same. The Tribunal also considered that to adopt the approach suggested by the water companies would mean that a body would not have special powers, save in an ‘exceptional case’. The Tribunal also highlighted that such an approach did not take into account the fact that the powers conferred by the Act enabled the water companies to compel entry / the right to lay pipes, whereas in private law the affected landowner would have the right to obstruct or refuse to engage with negotiations for the same.
- Power to impose hosepipe bans (para 126): the Tribunal noted in particular that a person who contravened a prohibition on use committed a criminal offence. “That sets the power apart from any normal rules of private law. The definition of a criminal offence is a classic use of State power that has survived the changes in the role of the State over the previous century.”
The Upper Tribunal rejected the argument that water companies were public authorities within the meaning of Article 2(2)(c) (the ‘control’ test). The Tribunal rejected the suggestion that should look at control or supervision over functions the companies were required to perform (in the sense of being required to perform certain functions either by statute or under the terms of their Licences) and emphasised that the focus should instead be on manner of performance of those functions. The Tribunal considered that the test required them to “take an overall view of whether in practice the companies operate in a genuinely autonomous manner in the provision of the services that relate to the environment. It is not sufficient to show that they do not do so in one or two marginal aspects of their business. Nor is it necessary to show that they do not do so in almost every aspect of their business.” In concluding at para 155, it made clear that the control test was a “demanding one” which “few commercial enterprises will satisfy”. It noted that the companies were subject to strict regulation and oversight, and there was the potential for extensive involvement and influence over the way they performed their services. However,, “the evidence falls far short of showing that the Secretary of State, OFWAT and the EA influence their performance, individually or collectively, whether by actual intervention or by more subtle forms of influence, to such an extent that the companies have no genuine autonomy of action.”
The Upper Tribunal also had to consider a preliminary issue raised by the Secretary of State of whether it had (and the First-tier Tribunal had had) jurisdiction to entertain the appeals as it only had jurisdiction over a decision notice issued by the Information Commissioner under s.50(3)(b) FOIA and not on the issue of whether a body was a public authority. Reliance was placed, inter alia, on Sugar v BBC  UKHL 9. The Upper Tribunal comprehensively rejected the challenge to its jurisdiction (see paras 25-54), concluding (at para 42) that “the interpretation proposed by the Secretary of State is not one that we think Parliament can have intended and we would not attribute it to Parliament unless there were authority that required us to do so”, which provisional view was not displaced following consideration of Sugar (para 54).
Jacqueline Lean acted for the water companies (led by Tom de la Mare QC)
James Maurici QC represented the UK Government in the earlier proceedings before the CJEU.